Yesterday's news that Tesla Motors is set to roll out an affordable electric vehicle within the next four years was well received by the electric vehicle market. Many people are suggesting that once Tesla breaks into the affordable market it should not be too long before electric vehicles are accepted by the masses and sales begin to rise. However, will Tesla be forced to compromise style for price?
Large scale compromise is not inevitable
The fact is that the electric car technology that we have in front of us today will look out of date by the time Tesla rolls out its "affordable" electric vehicle within four years. There will also have been efficiencies in manufacturing, increased demand for specific materials, and indeed technology will also have advanced significantly. This potentially creates the "perfect storm" for the electric vehicle market and while maybe the more luxury items associated with the Tesla of today may not be visible on the basic "affordable" model of the future, it will still incorporate the latest groundbreaking Tesla technology.
We have seen price brackets of anywhere between $30,000 and $40,000 mentioned, which would indeed make the vehicle more affordable to the masses. The more affordable this becomes, the higher the sales which means the greater the return therefore enabling companies to reduce their initial profit margins in favour of increased sales. Increased sales then allow for new models to "hit the market running" therefore creating potentially unstoppable momentum going forward.
Will the rest follow where Tesla leads?
At this moment in time there are a number of issues with regards to the electric vehicle market including battery capacity, recharging stations as well as the price of electric vehicles themselves. As momentum continues to build in the EV market this will create an environment which will encourage the building of recharging stations, investment in battery technology and bit by bit the sector will move forward.
Quote from ElectricForum.com : "Last week I setup an appointment for a test drive with the new Model S. I've seen the car, sat in it, and messed around with the display previously in the show room, and have been waiting for them to get a test drive vehicle locally so I can give it a spin."
As and when other car manufacturers see a "gap in the market" they will have more confidence investing their research and development budgets in the knowledge that a return is more probable than perhaps in today's market. Tesla is the leader and something of a beacon for the electric vehicle market and at this moment in time there is no reason to doubt why this widely held view will should not continue into the future.
One step forward, two steps back
In many ways, taking into account recent news from the electric vehicle sector, it does seem to be one step forward and two steps back with the likes of Better Place and Fisker encountering financial difficulties. However, under the surface there is no doubt that progress is being made within the industry as a whole and while short-term confidence may well be knocked due to negative news stories there is no reason to change the long-term view that electric vehicles will eventually make it to the mass market.
Tesla has been a market leader for some time and the fact that the company is willing to take on the "affordable" electric vehicle market is certainly a sign of confidence. There are few names in the electric vehicle market which grab the headlines, grab the attention of motorists, and indeed have the ability to move markets like Tesla can. The fact is that if Tesla is not able to downsize and adapt its technology to the affordable market of the future then we may need to look at the electric vehicle market again.